Digital Media Licensing Association

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Today’s blog post from Google is, unfortunately, simply another attempt to divert attention away from the devastating impact their self-preferencing has had on the online market, making many of the same old arguments we have seen before.

Commissioner Vestager has been clear that in her view Google’s systematic self preferencing of its own comparison shopping service, along with its demotion of rivals, is in breach of European antitrust rules. But, in spite of the detailed work and analysis of the Commission and others over many years, Google still refuses to acknowledge the impact of its anti-competitive conduct.

If Google truly believes “in the interest of promoting user choice and open competition”, and in the strengths of its arguments, we would urge them to make their case in front of the Commission and complainants at an oral hearing.

The decision is in Google’s hands, but holding a hearing could provide a unique opportunity for Google to present its full defence and for complainants and other interested third parties to offer their perspectives. We have long believed that transparency and a meaningful debate is in everyone’s best interest, and an oral hearing is an important step in ensuring that such a debate takes place.

We look forward to supporting the Commission in taking the case forward and helping to find robust and workable long-term solutions to remedy the harms caused by Google’s anti-competitive practices. ICOMP’s members, who represent a wide range of interests in the digital sphere, will be keen to ensure that effective remedies are speedily reached.

Google will on Wednesday be accused by Brussels of illegally abusing its dominance of search in Europe, a step that ultimately could force it to fundamentally change its business model and pay hefty fines.

Margrethe Vestager, the EU’s competition commissioner, is to say that the US group will soon be served with a formal charge sheet alleging that it breached antitrust rules by diverting traffic from rivals in order to favour its in-house services, according to two people familiar with the case.

Serving Google with a so-called statement of objections will be the opening salvo in one of the defining antitrust cases of the internet era. It could prove as epic as the decade-long battle with Microsoft that ultimately cost the company more than €2bn in fines.

The commission’s move comes after a torrid a five-year investigation that Google came close to settling without charges last year. The draft deal collapsed after fierce objections were raised by ministers in France and Germany, and by some of the continent’s most powerful telecoms and media groups.

The EU’s antitrust case comes against the backdrop of a growing European backlash against Silicon Valley and the economic disruption of the digital age. Once lauded for their innovative spirit, big US tech groups have come under mounting criticism in Europe over their market dominance and the way they handle personal data, especially in the wake of the US internet surveillance scandal.

A decision on charges is to be taken by the college of 28 EU commissioners on Wednesday. Some commissioners are concerned that Ms Vestager has, according to one source, restructured and narrowed the case she inherited from her predecessor Joaquín Almunia. As well as search issues, the investigation has looked at allegations that Google illegally scrapes content from rivals, locks in some publishers into using Google search ads, and makes it hard for advertisers to move campaigns to rival search engines.

Although Google has faced antitrust questions on three continents for several years, the EU move is the first time the company has been accused of formal wrongdoing. It will be given 10 weeks to respond to the allegations and will have the opportunity to call a hearing to make its defence.

Ultimately, the commission has the power to levy fines of up to 10 per cent of Google’s global turnover and can impose far-reaching curbs on its business practices. Almost 20 complainants against Google want the search engine to abide by strict rules that ensure its formula treats its own services — providing results for travel, shopping, and maps — no differently from rivals. Spokespeople for Google and the commission declined to comment.

If the charges are proven, it could take at least a year and probably significantly longer for the commission to make a final decision. Google would probably challenge any ruling that goes against it through the European courts, opening a legal war that could run for years.

The commission’s long attempt to settle the case with Google under Ms Vestager’s predecessor Mr Almunia made it one of the most fraught and politically charged antitrust cases to be dealt with by Brussels.

Google supporters feel the commission’s volte-face on a settlement reflected politics rather than an independent assessment. No EU antitrust case has ever been extended to three settlement offers, or been revived after complainants were formally warned that their case is about to be rejected.

On top of the pressure from Brussels, this week Google is also under scrutiny in France where lawmakers are considering an initiative that would force it to hand over its secret formula for ranking websites.

Revealing our algorithms — our intellectual property — would lead to the gaming of our results, which would be a bad experience for users
– Google

The French senate is likely to adopt a bill this week which would allow the country’s national telecoms regulator to monitor search engines’ algorithms, with sweeping powers to ensure its results are fair and non-discriminatory. The French initiative will become law only if it is adopted by the senate and the lower house of parliament and will also require government backing.

Critics complain that Google’s algorithm can be skewed to hurt rivals and want it published to ensure accountability. Google argues such transparency would make its search engine a target of spam and hand rivals its business secrets for free.

A spokesperson for Google in France said: “We’re transparent about what ranks well on Google, including when we make changes, but by definition, not everyone can come top. Revealing our algorithms — our intellectual property — would lead to the gaming of our results, which would be a bad experience for users.”

The amendment, proposed by centre-right lawmakers and attached to a broader economic reform bill assembled by economy minister Emmanuel Macron, has yet to secure the government backing needed to survive the legislative process and pass in the National Assembly.

But Catherine Morin-Desailly, chair of the Senate’s culture, education and communication committee, told the Financial Times that discussions with the government were encouraging.

“The government is well aware of the issues,” Ms Morin-Desailly said. “It’s a question of ensuring fairness. Too many businesses view search engines as bottlenecks. The net is tightening around [Google].”

If approved, the proposal would give Arcep, France’s telecoms regulator, oversight of any search engine that has sufficient power to “structure the functioning of the digital economy”. Google would be required to provide links to at least three rival search engines on its homepage, and disclose to users the “general principles of ranking”.

In a very frank article in Variety, Kurt Sutter, executive producer of the FX drama series “Sons Anarchy” talks about how Google is misrepresenting the truth about piracy and copyright laws. He says they systematically destroying the future of artists by spending tens of millions of dollars each year on eroding creative copyright laws.

PACA and other international trade associations have been actively involved in IComp, an industry initiative for organizations and businesses involved in Internet commerce, which is working to stop some of Google’s practices, but we need the support of our members and the U.S. Congress. We applaud the EU and their ongoing efforts against Google.

The European Consumer Organisation has stepped up its involvement in the European Commission’s antitrust investigation into how Google Inc. puts its preferred services atop search results while demoting rivals, particularly in price comparison searches. Currently an ‘interested party’, essentially having observer status, BEUC has today applied to be a formal complainant.

The European Commission has recently signalled its willingness to settle on the basis of Google’s suggested remedies, but BEUC believes consumer concerns have not been suitably addressed.

Commenting, Monique Goyens, Director General of The European Consumer Organisation said:

“Adequate answers have not been found to the problem of Google stacking its search results as suits itself. Users are given the impression their searches are neutrally decided and this problem is exacerbated in price comparison searches. That is why we are becoming formally involved in this process. European consumers deserve a better outcome, the remedies currently proposed by Google do not meet users’ legitimate expectations.”

“The placement of three rival services beside Google’s preferred results is not yet merit-based and so they are not neutral. Such stacking will lead to broader problems for the market further down the line. This kind of online real estate does not come cheap, so affording Google too much discretion to decide who is a ‘rival service’ is weighted in favour of those with the greatest commercial clout. “

“Clearly the issue requires further examination. EU antitrust rules are there to protect fairness within the European Single Market. It is critical that a solution recognises a ‘non-discrimination principle’ and does its utmost to allow users to get back to searching, not being led.”

Pursuant to an article today in Reuters, they suggest that the EU Commission and Google have reached an agreement to settle a 3 year European antitrust probe that allays concerns over blocking rivals from internet search results and avoids a potential fine of $5 billion dollars. A decision is expected in the next few days…READ THE ARTICLE HERE